VOL. 125 | NO. 94 | Friday, May 14, 2010
Consumer Spending Down in April
ANNE D'INNOCENZIO | AP Retail Writer
NEW YORK (AP) – Americans pulled back from the malls in April, spending less in retail outlets than they did in March, figures released Thursday show.
The lull comes on the heels of three straight month-to-month gains in the retail spending figures, released by MasterCard Advisors’ SpendingPulse.
April’s business was hurt by cool weather as well as an early Easter that spurred sales in March. But the speed bump also shows that the economy remains on uncertain ground, said Kamalesh Rao, director of economic research for SpendingPulse.
Including goods from food to clothing to gasoline – but excluding cars – U.S. retail sales fell 2 percent last month from March, according to SpendingPulse, which estimates spending in all forms including cash.
That month-to-month decline followed a 1.4 percent increase in March, a 1.9 percent gain in February and 2.8 percent increase in January. Excluding gas and auto sales, retail spending rose 0.3 percent in April from March. In March, that figure rose 1.3 percent and ticked up 0.6 percent in February compared with the prior months.
Retail sales growth, excluding auto sales, cooled from year-ago levels as well. Retail sales excluding autos rose 6.1 percent in April, following a 6.9 percent increase in March and a 6.4 percent gain in February compared with a year earlier. The year-over-year figures are not seasonally adjusted, but the month-to-month figures are.
“We’re still in recovery mode. This is not being reversed,” Rao said. But he noted that “this is a reminder that even though we have seen a rebound, we are still in an environment of high unemployment and relatively high savings rate.”
Rising gasoline prices also helped to depress overall figures, Rao noted. He said that gasoline pumping was down 1.1 percent in April compared to a year earlier. Increases in gas prices tend to boost overall retail sales, but because April precedes the driving season, consumers have more room to cut back on spending on gas.
With consumer spending — including major items like health care — accounting for 70 percent of U.S. economic activity, according to the government, economists watch it closely for clues to what lies ahead. Analysts will also be studying first-quarter earnings reports from major retailers, which started to be released this week.
Department store operator Macy’s Inc. reported Wednesday that it returned to profitability during the first quarter, helped by its intense focus on tailoring its merchandise to local markets. However, the merchant, which boosted its annual outlook last month, said it’s too early to further raise its guidance for the year because of economic uncertainty.
SpendingPulse issued its data ahead of the release of the government figures, which are due out Friday. Economists surveyed by Thomson Reuters predict that the government figures will show a 0.4 percent increase in April compared with March.
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